Join ABRIGO for this complimentary webinar on: Tuesday, May 4, 2021 at 1:00 PM ET / 12:00 PM CT.
Expanding PPP Relationships For Long-Term Success
PPP loans have created countless new business customers for banks and credit unions. The challenge now is, how do you convert those loans into full banking relationships? The answer is simple, but the process takes commitment.
In this webinar, Chris Carlson, Managing Director of Core Academy, will provide a process that you can use to convert many of these PPP transactions into lifetime customer relationships.
You will learn:
Congress passed ICBA-advocated legislation to extend the Paycheck Protection Program ahead of its March 31 expiration, sending the extension to President Joe Biden to sign into law.
Background: Under existing law, any application not approved by March 31—even if it was submitted prior to that date—cannot receive PPP funds. The newly passed bill allows borrowers to apply for loans through May 31 and gives the SBA until June 30 to consider applications.
ICBA Position: ICBA strongly supported the two-month extension to ensure small-business and nonprofit applicants are not stranded by an abrupt shutdown.
What's Next: With the PPP extended, ICBA continues urging Congress and the SBA to make program fixes related to eligibility, use of proceeds, farm partnerships, and Schedule C borrowers.
More: PPP information and resources are available on the SBA and Treasury sites and ICBA's PPP and EIP News page.
With the Senate expected to vote this week on House-passed legislation to extend the Paycheck Protection Program, ICBA is urging community bankers to contact their senators in support.
The Bill: The ICBA-backed bill—which the House passed last week on a 415-3 vote—would allow borrowers to apply for loans through May 31 and give the SBA until June 30 to consider applications.
Taking Actions: ICBA's Be Heard grassroots action center makes it easy for community bankers to urge their members of Congress to extend the PPP before it expires March 31.
The SBA released its new interim final rule and new application forms implementing Paycheck Protection Program changes for sole proprietors and other borrowers that file IRS Form 1040, Schedule C. An SBA webinar on the updates is scheduled for today.
Resources from SBA:
Webinar Today: The SBA is scheduled to hold a Microsoft Teams webinar on these updates at 4 p.m. (Eastern time) today, March 4.
More: Additional PPP information and resources are available on the SBA and Treasury sites and ICBA's PPP and EIP News page.
The SBA said it will "soon" publish a new Paycheck Protection Program interim final rule and issue a new application for Schedule C filers. Until then, it issued the following considerations:
Second Draw (PPP2) loans include a requirement for the applicant to evidence a 25% reduction in revenue, and the 2483-SD borrower application has the following definition: “Gross Receipts of a borrower must be aggregated with gross receipts of its affiliates.”
Below are a few questions in this regard. If possible in responses, it would also be great if there can be reference where in the Interim Final Rule or FAQs answers can be found:
The Biden administration announced several Paycheck Protection Program reforms to target the program to the smallest businesses.
The updates include:
Additional PPP information and resources are available on the SBA and Treasury sites and ICBA's PPP and EIP News page.
EIDL Advance Reconciliation Payments - SBA will be remitting reconciliation payments beginning February 9, 2021 through February 19, 2021 for any loan with an SBA forgiveness payment that was
reduced by the amount of an EIDL Advance.
• PPP lenders are not required to request remittance of the reconciliation payment. SBA will automatically identify loans where SBA remitted a forgiveness payment to a PPP lender that was
reduced by an EIDL Advance.
• The amount of the reconciliation payment will be equal to the previously-deducted EIDL Advance amount, plus interest through the remittance date. SBA will use the interest accrual
method currently identified in the Forgiveness Platform.
• SBA will remit the reconciliation payment to the ACH account identified by the PPP lender of record in the Forgiveness Platform. The ACH addenda for these payments will be identical to the on-going Forgiveness payment processing.
• After processing is complete, the amount of the reconciliation payment will be displayed on the Payment Dashboard under the Adjustment column. In addition, a payment reconciliation letter will be posted in the Forgiveness Platform for your records.
The PPP Lender is responsible for notifying the borrower of the reconciliation payment. The PPP Lender is also responsible for re-amortizing the PPP loan and notifying the borrower of the amount of the next payment due or advising the borrower that the loan has been paid in full, whichever is applicable. If the amount remitted by SBA to the PPP lender exceeds the remaining principal balance of the PPP loan
(because the borrower made a payment on the loan), the PPP lender must remit the excess amount, including accrued interest paid by the borrower, to the borrower.
Additional resources pertaining to the Economic Aid Act and PPP – including application forms, lender guidance, and PPP program rules – can be found on SBA’s PPP website or the U.S. Treasury PPP website.
Office of Capital Access
U.S. Small Business Administration
Insured depository institutions under $10 billion in assets have made more than half of 2021 first- and second-draw Paycheck Protection Program loans, according to SBA data.
The latest breakdown shows these institutions have approved more than 453,000 PPP loans worth $39.4 billion out of the total count of 891,044 loans worth $72.7 billion approved through Jan. 31.
Of the 2021 PPP loan total, nearly $68 billion has been approved for second-draw loans and nearly $4.8 billion for first-draw loans.
Additional PPP information and resources are available on the SBA and Treasury sites, ICBA's PPP and EIP News page, the Independent Bankers Association of Texas's matrix of PPP updates in the stimulus law, and ICBA's summary of the stimulus package's community banking provisions.
Austin, Texas, February 3, 2021 – Abrigo is proud to announce that it has helped community financial institutions secure more than 53,000 Paycheck Protection Program (PPP) loans totaling more than $6 billion through its Abrigo PPP Solution since the latest round of the program opened January 11, 2021. Abrigo has enabled more than 380 financial
institutions to originate nearly $40 billion in PPP loans for 335,000 small businesses, impacting an estimated 1.8 million jobs since the PPP launched in April 2020.
The latest round of PPP lending enables financial institutions to provide loans to first- and second-time borrowers, a change from the earlier rounds of the PPP. Abrigo quickly updated its platform to meet the needs of the latest guidance and new borrower and lender forms. Customers leveraging the Abrigo PPP solution for origination have simplified and
automated the underwriting processes, so they’ve been able to manage the volume of applications and get capital into the hands of small business owners quickly.
Southwestern National Bank adopted Abrigo’s PPP Solution to strengthen its ability to quickly respond to customer needs. “This partnership enables us to help our customers at a much faster pace and make a real difference in our community,” said Ajit Singh, CIO at Southwestern National Bank. Serving community financial institutions and communities has always been a top priority for Abrigo. These institutions have been the backbone of the PPP, helping customers that are not always served by the largest banks. Based on the latest Small Business Administration (SBA) PPP loan amounts for community financial institutions under $10 billion, Abrigo’s customers account for 15% of their total loan volume in the latest round of funding. Community banks and credit unions leveraging the Abrigo PPP Solution offer their customers and members a seamless, automated experience without sacrificing their customer focus.
Abrigo is a leading technology provider of compliance, credit risk, lending, and asset/liability management solutions that
community financial institutions use to manage risk and drive growth. Our software automates key processes – from antimoney laundering to asset/liability management to fraud detection to lending solutions – empowering our customers by addressing their Enterprise Risk Management needs. Visit www.abrigo.com to learn more. Follow Abrigo on social media using @WeAreAbrigo.
SBA, in continuing established communications messaging, provides the following:
Information Notice 5000-20087 – Updated Section 1112 Tax Implication Reporting Requirements
Procedural Notice 5000-20089 – Extend 7(a) and 504 Electronic Signatures through 4-30-21
Procedural Notice 5000-20090 – Extend Microloan Electronic Signatures through 4-30-21
Procedural Notice 5000-20088 – Extend Microloan Closings through 4-30-21
The SBA said it is working to improve reviews of first-draw Paycheck Protection Program loans. The agency said anomalies—mostly data mismatches and eligibility concerns—were identified in approximately 4.7 percent of lender-submitted data.
The SBA said these concerns will require follow-up between lenders and borrowers so borrowers can access a second round of loans. It encouraged borrowers and lenders to work together as quickly as possible to resolve the issues.
Announcing that it has approved more than 400,000 loans for approximately $35 billion during the newest round of PPP lending, the SBA also said it is planning additional guidance for lenders while equipping field teams with information to help lenders and borrowers.
Additional PPP information and resources are available on the SBA and Treasury sites, tomorrow's ICBA Community Bank Briefing, ICBA's PPP and EIP News page, the Independent Bankers Association of Texas's matrix of PPP updates in the stimulus law, and ICBA's summary of the stimulus package's community banking provisions.
In classic SBA style, there’s been a lot of updates on PPP over the last few days – and we’re sure your members will benefit from the run down from Abrigo. Whether they decide to partner with Abrigo or not for origination of these loans, these resources will help all of your members navigate this round of PPP.
Materials to share:
Abrigo has begun supporting community financial institutions participating in the latest round of PPP through its Sageworks SBA Lending solution. Customers leveraging the solution can simplify and automate the underwriting processes of PPP so you can quickly get money into the hands of small business owners. Learn how you can get implemented and begin automating PPP loans within 48 hours.
Press Release – Abrigo is Ready & Customers are Live
Webinar Recording – What’s Changed with PPP in 2021
PPP Live Demo – First is Tuesday (1/12) at 3 PM EST, and we’ll be adding additional dates and times each day
Blog post – Lender guidance for borrowers wanting a second loan
WASHINGTON – The U.S. Small Business Administration (SBA), in consultation with the Treasury Department, announced today that the Paycheck Protection Program (PPP) will re-open the week of January 11 for new borrowers and certain existing PPP borrowers. To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13. The PPP will open to all participating lenders shortly thereafter. Updated PPP guidance outlining Program changes to enhance its effectiveness and accessibility was released on January 6 in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act.
This round of the PPP continues to prioritize millions of Americans employed by small businesses by authorizing up to $284 billion toward job retention and certain other expenses through March 31, 2021, and by allowing certain existing PPP borrowers to apply for a Second Draw PPP Loan.
“The historically successful Paycheck Protection Program served as an economic lifeline to millions of small businesses and their employees when they needed it most,” said Administrator Jovita Carranza. “Today’s guidance builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to ensure their path to recovery.”
“The Paycheck Protection Program has successfully provided 5.2 million loans worth $525 billion to America’s small businesses, supporting more than 51 million jobs,” said Treasury Secretary Steven T. Mnuchin. “This updated guidance enhances the PPP’s targeted relief to small businesses most impacted by COVID-19. We are committed to implementing this round of PPP quickly to continue supporting American small businesses and their workers.”
Key PPP updates include:
The new guidance released includes:
For more information on SBA’s assistance to small businesses, visit sba.gov/ppp or treasury.gov/cares.
About the U.S. Small Business Administration
The U.S. Small Business Administration helps power the American dream of business ownership. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.
The Small Business Administration last night issued several documents on the next round of the Paycheck Protection Program authorized by the end-of-year stimulus package. Here's the latest.
The new documents include:
An interim final rule on the PPP as amended by the Economic Aid Act. An interim final rule on second-draw PPP loans. Guidance on accessing capital for minority-, underserved-, veteran- and women-owned businesses. Following the passage of ICBA-advocated stimulus provisions simplifying PPP loan forgiveness and supporting a new round of PPP lending, the interim rules include answers to questions about registration, loan underwriting, fees, electronic submissions, reporting disbursements, agent fees, and more.
The interim rules note that second-draw PPP loans generally are guaranteed by the SBA under the same terms as first-draw loans, though these borrowers are generally required to have 300 or fewer employees, exhausted their first-round funds and a 25 percent or greater revenue reduction from 2019 to 2020.
The guidance notes that the Economic Aid Act set aside funds for lending by community financial institutions, first-draw PPP borrowers, and the smallest businesses. Further, it says the SBA will accept PPP loan applications only from community financial institutions for at least the first two days after the PPP loan portal reopens.
The guidance also says PPP lenders should encourage borrowers to complete a new demographic reporting section on the PPP borrower application to help the program reach underserved, minority-owned, veteran-owned, and women-owned businesses.
While ICBA continues studying these documents, additional information is available on the SBA and Treasury PPP pages, and Independent Bankers Association of Texas matrix of the law's PPP updates, and ICBA's summary of the stimulus package's community banking provisions.
ICBA's next Community Bank Briefing featuring 2021 updates is scheduled for 2 p.m. (Eastern time) tomorrow, Jan. 8. During the 60-minute webinar, ICBA experts will address the important SBA actions and discuss legislative developments. Participants are encouraged to submit questions prior to the briefing or bring them to the briefing as the ICBA team will answer questions from community bankers. Learn more and register.
Meanwhile, we will continue to provide you the very latest information as it becomes available.
With the Senate bringing two separate measures that include Paycheck Protection Program forgiveness simplification to a vote starting today, ICBA continues calling on community bankers and their small-business contacts to weigh in with lawmakers.
ICBA's Be Heard grassroots action center allows community bankers and small-business owners to urge Congress to address the deduction of Economic Injury Disaster Loan advances from PPP loan forgiveness. ICBA encourages community bankers to direct borrowers to the small-business alert.
While borrowers may receive up to a $10,000 EIDL advance, those funds will be deducted from PPP loan forgiveness. ICBA has repeatedly raised this issue with Congress and the SBA, reiterating it Monday in a new joint message to lawmakers.
Meanwhile, ICBA continues calling on community bankers and small-business owners to urge Congress to immediately pass bipartisan legislation to simplify PPP forgiveness.
While the Senate measures are not expected to pass amid ongoing stimulus talks, ICBA continually works to ensure these PPP priorities remain a key part of the debate.
Politico reported on the frustrations of community banks and other lenders with the Paycheck Protection Program's loan-forgiveness process.
The report notes that while policymakers pledged to forgive PPP loans if employers maintained payroll, the SBA has yet to forgive any of the program's $525 billion in loans, which is creating headwinds for borrowers and lenders.
“No bank I know anywhere in the country has received any money from the SBA," said Brad Bolton, ICBA vice chairman and president and CEO of Community Spirit Bank in in Red Bay, Ala.
ICBA continues urging community bankers to call their members of Congress and urge support for legislation to simplify PPP loan forgiveness. The bipartisan Paycheck Protection Small Business Forgiveness Act (H.R. 7777/S. 4117) would provide simplified forgiveness for PPP loans of $150,000 or less.
ICBA last week continued its campaign for simplified forgiveness in a written statement for a House subcommittee hearing, noting a Government Accountability Office report that complex PPP forgiveness applications could take up to 15 hours for borrowers to complete and 75 hours for lenders to review.
ICBA: Exclude PPP loans from asset calculationsICBA called on Congress to direct federal regulators to exclude Paycheck Protection Program loans from bank and bank holding company asset threshold calculations.
In letters to House and Senate leaders, ICBA noted that the surge of PPP loans has swelled the balance sheets of community banks. Absent a legislative fix, asset-size growth will inadvertently push many community bankers over regulatory thresholds and subject them to additional supervision, regulations, and costs.
Whereas banks normally have advanced notice that they are close to crossing an asset threshold and invest in a strategic plan to comply with additional regulations, rapid asset increases due to PPP lending have caused temporary balance sheet inflation.
"This is an exceptional circumstance and bank regulation must be flexible enough to account for it rationally and ensure that PPP lenders are not punished with regulatory costs simply for their participation in an emergency program," ICBA wrote.
The Independent Community Bankers of America (ICBA) today said recently released data show that community banks are the unequivocal leaders of the U.S. economic recovery due to their outsized role as providers of Paycheck Protection Program (PPP) small-business loans.
According to the Small Business Administration data, community banks:
ICBA and community bankers continue calling on Congress to advance needed PPP reforms in the next stimulus package.
ICBA urges Congress to include recommendations in the next legislative package to create relief for American small businesses
With Congress continuing to debate the next economic stimulus package, community bankers can continue using ICBA's Be Heard grassroots action center to weigh in with recommendations.
ICBA's custom message encourages lawmakers to advance a more straightforward approach to Paycheck Protection Program loan forgiveness as well as capital, accounting, and tax relief.
Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza are scheduled to testify before the House Small Business Committee this Friday on the federal pandemic response.
ICBA last week released talking points and a sample letter to borrowers about the agencies' release of information about individual PPP loans. ICBA also offers a sample press release and op-ed on PPP efforts on its Tell Your Story toolkit.
Following the SBA and Treasury Department release of information about individual Paycheck Protection Program loans, ICBA released talking points and a sample letter to PPP borrowers about the agency announcement.
The member-protected talking points and letter template note that the federal agencies—not community banks—released the loan-level information. The resources are available to help community banks who receive questions from PPP borrowers.
The SBA and Treasury released business names, addresses, lender names, and other information for loans of $150,000 and up, which account for nearly three-quarters of the dollar volume of PPP loans. For loans below $150,000, the agencies will not release business names but will report loan totals, aggregated by ZIP code, industry, business type, and various demographic categories.
Overall, SBA and Treasury said the 4.9 million PPP loans have supported more than 51 million jobs and more than 80 percent of small-business employees, with 27 percent of program funds reaching low- and moderate-income communities.
The data release follows the extension of the PPP application deadline until Aug. 8 shortly after the SBA stopped accepting PPP applications last week. The agency has roughly $130 billion in remaining PPP funds.
ICBA continues urging community bankers to use its Be Heard grassroots action center to recommend reforms to include in the next economic relief package, which Congress is debating now. Community bankers can also access ICBA’s Tell Your Story toolkit for a sample press release and op-ed to share the positive impact of their PPP efforts.
The data release also includes overall statistics regarding dollars lent per state, loan amounts, top lenders, and distribution by industry. The loans have reached diverse communities proportionally, across all income levels and demographics.
In addition, the data provides information regarding the sizes of participating lenders and participation by community development financial institutions, minority depository institutions, Farm Credit System institutions, fintechs and other nonbanks, and other types of lenders. It further contains data showing the reach of the program in underserved communities, rural communities, historically underutilized business zones (HUBZones), and participation by religious, grantmaking, civil, professional, and other similar organizations.
View the Paycheck Protection Program Report through June 30th.
The Senate passed legislation to extend the Paycheck Protection Program application deadline until Aug. 8, sending it to the House hours before the SBA stopped accepting PPP applications.
The bill, which the Senate passed via unanimous consent, needs to be approved by the House and signed by the president to take effect. After the SBA has approved $520.6 billion in PPP loans through Tuesday evening, the program has roughly $130 billion in remaining funds.
The Senate bill also would decouple the PPP reauthorization from the SBA's 7(a) program to avoid shutting it down when the PPP expires. Politico reported that the Senate extended the PPP into August to give Congress time to pass the next economic relief package, which lawmakers are debating now.
ICBA continues calling on community bankers to use its Be Heard grassroots action center to provide lawmakers with comprehensive policy recommendations as Congress considers the next relief package.
OriTrust's PPP Fast Application is a powerful bank developed tool that can help its members fast-track PPP lending and is very straightforward and simple to use. It helps with making sure the bank is collecting all the required information and with the ongoing monitoring of information to ensure each borrower obtains loan forgiveness.